Maya Iyer is a Software Professional who availed a Term Loan of ₹ 50 lacs at an interest of 9% p.a. from Cosmos Bank, Cochin for buying a XYZ Brand Vehicle. The loan was taken on 15th February, 2020 repayable in 10 Years

CS Professional · Banking and Insurance - Laws and Practice · PYQS · December 2025
Maya Iyer is a Software Professional who availed a Term Loan of ₹ 50 lacs at an interest of 9% p.a. from Cosmos Bank, Cochin for buying a XYZ Brand Vehicle. The loan was taken on 15th February, 2020 repayable in 10 Years' EMIs and is against Hypothecation of the vehicle. She serviced the EMIs up to 15th June, 2022, promptly. However, she was laid off by the company in July, 2022 and lost her job. The EMIs could not be serviced thereafter. The loan became overdue. Answer the following questions, with reference to the above situation, considering the Income Recognition & Asset Classification (IRAC) norms issued by RBI : Does it come under any other NPA category thereafter ?

Answer & Explanation:

Depending on the duration for which it remains NPA: Sub-standard Asset: From 14 October 2022 up to 12 months Doubtful Asset: If the loan remains NPA for more than 12 months → From 14 October 2023 onwards Loss Asset: If identified by the bank / auditors / RBI as uncollectible, irrespective of time.

Topics: Banking Operations

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